The new so-called ‘rich tax’ could take away the “lifeline to small business” by excluding traditional investors from taking part in the much-touted successor to the Business Expansion Scheme, according to tax, pension and legal adviser firm, ITC Consulting.
The market broadly welcomed the Employment and Investment Incentive (EII) as a positive development for funding SMEs but Sonia McEntee, managing director of ITC, told The Sunday Business Post the subscription take-up would now be low because of the additional tax burden on the kind of high earners who tend to support schemes such as these.
“The scheme is being strangled at investment point by effectively excluding the traditional investor,” she said.
Under the recent Budget, anyone with an income of €125,000 or more has to pay a minimum of 30% of their earnings in tax. Previously, the income threshold was €250,000 and the tax was 20%.